rime Minister Anthony Albanese wants to be the leader who puts the shovel in the ground to build Australia’s first very fast train.
“Australia is the only inhabited continent on earth that doesn’t already have high-speed rail,” Albanese declared this week, after announcing planning will proceed on a 194-kilometre route from Newcastle to Western Sydney International Airport.
No decision on the project will be made for two years but if completed, getting from Newcastle to Sydney will take an hour instead of the more than 2½ hours today.
However, while train manufacturers and construction companies are delighted to accept billions of dollars in taxpayer funds to construct the proposed $93 billion project – which will be the most expensive piece of infrastructure ever built in Australia – economists, engineers and investors roll their eyes and bet privately that it will never happen.
“Everyone always gets very excited when these new infrastructure projects come along and get announced, and everyone always thinks it’s going to sort of be nirvana,” says David Orsmond, economics professor at Sydney’s Macquarie Business School.
Past reviews of proposed high-speed rail routes have never been able to justify the costs, Orsmond points out. “The question is, well, what’s different this time around?”
Lost in the hype of how many jobs will be created and declarations of “nation building” is the question of whether the project stacks up financially.
Not only is the mooted route, which will have some 115 kilometres of tunnels, eye-wateringly expensive and technically complex, needing to navigate national parks and consider potential earthquakes (the 1989 Newcastle earthquake killed 13 people), it comes at a time when project costs are soaring.
The price of 13 publicly funded infrastructure projects valued at $10 billion or more has risen by an extraordinary $130 billion compared with their initial estimates, according to data compiled by Deloitte Access Economics.
